WPP Reports Weak Q3, Cuts Full-Year Guidance; India Emerges as Sole Growth Market

WPP announced a challenging third quarter for 2025, with reported revenue down 8.4% year-on-year to £3.3 billion and like-for-like revenue down 3.5%. Revenue less pass-through costs decreased by 5.9% on a like-for-like basis. Reflecting these results, the company has revised its full-year guidance, now expecting like-for-like growth in revenue less pass-through costs to be between negative 5.5% and negative 6.0%, with a headline operating profit margin around 13%.

In stark contrast to global trends, India was the only one of WPP's top five markets to register growth. In the third quarter, India saw a 6.7% increase in revenue less pass-through costs, while major markets like the United States, United Kingdom, Germany, and China experienced declines. Year-to-date, India's like-for-like growth stands at a positive 2.1%, attributed to strong new business momentum, particularly in media planning and buying.

New Chief Operating Officer Devika Bulchandani is spearheading efforts to simplify WPP's offerings, making them more integrated, data-driven, and AI-powered, aiming to improve execution and client delivery. The company also plans to expand its market by focusing more on enterprise and technology solutions, alongside disciplined capital allocation.

Impact: This news indicates significant challenges for WPP globally, reflected in its revised guidance. However, the strong growth in India highlights the resilience and potential of the Indian advertising and marketing sector. This outlier performance in India might attract increased investment and attention from global players looking for growth markets, benefiting Indian businesses and potentially the Indian stock market's perception of the sector. For WPP, the strategic shift towards AI, data, and simplification is key to its future performance. Rating: 7

Heading: Difficult Terms and Meanings Revenue: The total income generated by a company from its normal business operations, usually from the sale of goods and services to customers. Reported Basis: Financial results that include the impact of currency fluctuations and accounting changes, presenting the raw numbers as reported. Like-for-Like (LFL) Revenue: Revenue growth calculated by excluding the impact of acquisitions, disposals, and currency fluctuations, providing a clearer view of organic business performance. Pass-Through Costs: Direct costs incurred by a company that are passed on to the client, such as media spend in an advertising agency. Revenue less pass-through costs represents the agency's net revenue or income. Headline Operating Profit Margin: A measure of profitability that excludes certain items considered non-recurring or non-operational, showing the core profit generated from the company's main business activities. New Business Momentum: The rate at which a company is winning new clients or projects, indicating growth potential and market demand for its services. Hogarth: WPP's global production company, which provides creative production services. Chief Operating Officer (COO): A senior executive responsible for managing the day-to-day operations of a company. Enterprise and Technology Solutions: Services and products designed for large organizations, often involving complex IT systems and digital transformation. Capital Allocation: The process by which a company decides how to distribute its financial resources among various investment opportunities, debt repayment, or shareholder returns.